ESG In VC | $60M For Los Angeles And Seattle Startups | $50m For Supply Chain Tech

In this edition we look at venture capital’s relationship to ESG investing and chat about why the industry is behind other asset classes, but also hear from some firms who have made it a priority, we check in with Unlock Venture Partners about its new $60 million fund to target startups in Los Angeles and Seattle, I dive into the funding numbers in the growing Central and Eastern European markets, and we chat with a supply chain tech startup that has garnered more than 7,000 customers. Let’s get to it.

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On Monday, The UN PRI released its first report on the state of ESG in venture. While it highlighted the slight progress the industry has made, it largely focused on the long road ahead. Peter Dunbar, a private equity ESG senior specialist at the UN PRI, tells Midas Touch that the UN PRI hopes venture firms start taking ESG more seriously because they have the strongest influence on how a company grows. “[VC] is a small but a vital part of the ecosystem,” Dunbar says. “It's really influential. It's going to impact the way everyone lives in the future. It’s the first institutional capital into companies. If you're first in, then what you do with those companies has an impact on larger investors further up the investment chain.”

LPs: Dunbar says one of the main reasons the industry hasn’t embraced it as other asset classes have is most likely due to U.S.-based LPs. While many large institutional investors — especially in Europe — and pension funds have made ESG a main pillar of how they choose managers, many venture funds don’t rely on these backers for capital and have a more diverse set of LPs including operators and strategics and who aren’t necessarily as focused on ESG as institutional LPs...

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“We thought with supply chain management and production chain management, the only way to solve [the issues] was to approach it from moving offline relations to online relations and helping companies make sense of the data coming out of that,” he tells Midas Touch. But at the time, no one was trying to tackle that, so the former founders of ASIAM decided to try it themselves. They launched Inspectorio in 2016 to help companies and brands move their supply chain online and have better visibility and data surrounding quality and sustainability. Since Inspectorio launched its first product in 2017, the company has expanded its product offerings and more than 7,000 customers including Target and Kohl’s have signed on. 

The tech: The current product suite at Inspectorio covers three areas: quality, compliance and tracking. Through the three, companies are able to share data across their suppliers in real time which allows them to consistently be auditing. This, Moncayo says, is far more accurate than the old method of scheduled in-person audits that could be prepared for or even gamed. The constant monitoring helps companies maintain their quality standards more consistently while also allowing proactive workflow choices based on current data as opposed to reacting to past static sets. Inspectorio recently launched a new way for companies to also check if the underlying suppliers are sustainable or following ESG practices too...

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